ex10-3.htm


    Exhibit 10.3


    BMO
CAPITAL MARKETS CORP.

    115
S. LaSalle Street, 13th Floor
West

    Chicago,
IL 60603

    


    PAYOFF AND BAILEE
LETTER

    


    November
30, 2009

    


    


    Ministry
Partners Funding, LLC

    955 West
Imperial Highway

    Brea,
California 92821

    


    U.S. Bank
National Association

    One
Federal Street, 3rd Floor

    Boston,
MA 02110

    Attention:
David Duclos

    


    
      	
               
      

            	
              Re:

            	
              Payment
      and Satisfaction of Obligations of Ministry Partners Funding, LLC (the
      “Borrower”)
      under that certain Loan, Security and Servicing Agreement (the “Loan
      Agreement”) dated as of October 30, 2007 among Borrower, Fairway
      Finance Company, LLC, as Lender (the “Lender”),
      Evangelical Christian Credit Union, as Servicer (the “Servicer”), BMO
      Capital Markets Corp., as Agent (the “Agent”), U.S.
      Bank National Association, as Custodian (in such capacity, the “Custodian”) and
      Account Bank, and Lyon Financial Services, Inc. (d/b/a U.S. Bank Portfolio
      Services), as the Back-Up Servicer (the “Back-Up
      Servicer”).  Terms used and not otherwise defined herein
      shall have the meaning given to such terms in the Loan
      Agreement.

            


    

    


    Gentlemen:

    


    The Agent
has been advised that the Borrower desires to repay the total unpaid balance of
all amounts (including but not limited to, all principal, interest, expenses,
fees, other charges and any additional per diem interest charges) owing by
Borrower to the Agent and Lender (collectively, the “Unpaid
Balance”).  The Agent hereby acknowledges and confirms that the
total amount of the Unpaid Balance (excluding the fees of Agent’s counsel, as
referenced in the paragraph below) as of November 30, 2009 is $24,628,796.22
plus $1,400.00 per day in interest (the “Per Diem Amount”) for
each day thereafter.

    


    Payment of the amount of the Unpaid
Balance, any Per Diem Amount due and payable and fees of Greenberg Traurig, LLP
(“Greenberg”),
counsel to the Agent, in the amount of $7,000 (collectively, the “Aggregate Unpaid
Balance”) shall be made by Western Corporate Federal Credit Union (“WesCorp”), on behalf
of the Borrower and its sole Member and parent company, Ministry Partners
Investment Company, LLC, via wire transfer of immediately available funds to the
following accounts:

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Payment
of that portion of the Aggregate Unpaid Balance representing the fees of
Greenberg shall be wired to:

     

    Wachovia
Bank, N.A. - First Union National Bank

    200 S.
Biscayne Blvd., 15th Floor

    Miami,
Florida  USA  33131

    


    
      
        	
                ABA
      Number:

              	XXXXX
	
                Account
      Name:

              	XXXXX
	
                Account
      Number:

              	XXXXX
	
                Reference:

              	XXXXX


      

    

    


    Payment
of the remaining Aggregate Unpaid Balance shall be wired to:

    


    
      
        	
                Bank:

              	XXXXX
	
                ABA
      No.

              	XXXXX
	
                Account
      Name:

              	XXXXX
	
                Account
      No:

              	XXXXX
	
                Reference:

              	XXXXX


      

    

    


    Upon Agent’s and Greenberg’s receipt of
their respective portion of the Aggregate Unpaid Balance, the Agent, on behalf
of the Secured Parties, releases all of the Secured Parties’ liens and security
interests in the assets of the Borrower and all other persons who have pledged
any assets in favor of the Secured Parties to secure any obligations of the
Borrower  (collectively, the “Related Parties”) and
releases any guarantors from any and all liability for payment or performance of
the Aggregate Unpaid Balance and all other obligations under any Transaction
Documents.  In furtherance of the foregoing, on and as of the receipt
of the Aggregate Unpaid Balance (1) Agent hereby releases the Secured Parties’
security interest in and to all assets of the Related Parties, including,
without limitation, the Pledged Mortgages (as defined below), and all of such
security interests shall terminate without further action, (2) the Transaction
Documents shall automatically terminate and be of no further effect (except with
respect to provisions which, by their terms, expressly survive the termination
of such document), and (3) Agent grants to WesCorp or its designated agent the
authority to cause terminations of all UCC-1 financing statements that evidence
a security interest in the Related Party’s assets in favor of Agent to be filed
with the appropriate state and/or county agencies and to cancel any notices or
legends stamped, typed or otherwise set forth on any promissory notes or chattel
paper of the Borrower which indicates that such items are collateral for the
Agent.

    


    Reference is hereby made to collateral
files containing the collateral documents evidencing the mortgage loans pledged
to Agent as security for the obligations outstanding under the Loan Agreement,
along with other related documents (hereinafter collectively referred to as the
“Pledged
Mortgages”), which are being held by Custodian on behalf of the Agent, in
accordance with the Loan Agreement and that certain Custodial Agreement dated as
of October 30, 2007 (the “Custodial Agreement”)
among Borrower, Servicer, Agent, Back-Up Servicer and
Custodian.


    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

    The Pledged Mortgages are to continue
to be held by Custodian, subject only to Agent’s direction and control until
WesCorp has certified to Custodian and Agent that it has executed the wire
transfers in the amount of the Aggregate Unpaid Balance in the manner specified
above (which certification shall also include the Fed Reference Number of each
wire transfer), at which time the Pledged Mortgages shall be held by the
Custodian subject to the joint control of WesCorp and Agent, and no disposition
thereof shall be made absent instructions from both WesCorp and the Agent.
Thereafter Agent shall notify, via email, David Duclos (david.duclos@usbank.com)
with the Custodian and John Taylor (jtaylor@wescorp.org) with WesCorp of its,
and Greenberg’s, proper receipt of the Aggregate Unpaid Balance, which
notification shall have the effect of immediately releasing the Agent’s liens in
the Pledged Mortgages.  At such time as the Pledged Mortgages are
released as provided herein, the Custodian shall continue to hold such Pledged
Mortgages as bailee subject only to the direction and control of
WesCorp.

    


    Any mortgage loan assignments from
Borrower to Ministry Partners Investment Corporation received by the Custodian
prior to the Agent’s confirmation of receipt of the Aggregate Unpaid Balance
shall be held in escrow and shall be ineffective until such time as the Agent
has notified the Custodian of its receipt of the Aggregate Unpaid
Balance.

    


    This Payoff and Bailee Letter may be
executed in any number of counterparts, each of which when so executed and
delivered shall be deemed to be an original, but all such counterparts together
shall constitute one and the same instrument.  Delivery of an executed
counterpart of this Payoff and Bailee Letter by telefacsimile or other
electronic method of transmission shall be equally as effective as delivery of
an original executed counterpart of this Payoff and Bailee Letter.

    


    This Payoff and Bailee Letter shall in
all respects, be governed by, and construed in accordance with, the laws of the
State of New York, including all matters of construction, validity and
performance.

     

    [Signature
Page Follows]

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

    IN WITNESS WHEREOF, the undersigned
have executed this document as of the date first set forth above.

    


    


    
      
        	 
      	
                BMO
      CAPITAL MARKETS

              
	 
      	
                CORP.,
      as Agent

              
	 
      	 
      
	 
      	
                By:
      /s/ Brian
      Zaban

              
	 
      	
                Name:
      Brian
      Zaban

              
	 
      	
                Title:  Managing
      Director

              


      

    

    


    


    


    ACKNOWLEDGED
AND ACCEPTED BY:

    


    FAIRWAY
FINANCE COMPANY, LLC,

    as
Lender

    


    By:
/s/ Lori Gebron

    Name:Lori
Gebron

    Title:  Vice
President

    


    


    MINISTRY
PARTNERS FUNDING, LLC,

    as
Borrower

    


    By:
/s/ Billy Dodson

    Name:Billy
M. Dodson

    Title:  President

    


    EVANGELICAL
CHRISTIAN CREDIT UNION,

    as
Servicer

    


    By:
/s/ Mark Johnson                                                               

    Name:Mark
A. Johnson

    Title:  Executive
Vice President

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

    U.S. BANK
NATIONAL ASSOCIATION,

    as
Custodian, Account Bank and Securities Intermediary

    


    By:/s/ David
Duclos

    Name:David
Duclos

    Title:  Vice
President

    


    LYON
FINANCIAL SERVICES, INC.

    (D/B/A
U.S. BANK PORTFOLIO SERVICES),

    as
Back-Up Servicer

    


    By: /s/ John
Docken                                                       

    Name:John
Docken

    Title:  Senior
Vice President

    


    WESTERN
CORPORATE FEDERAL CREDIT UNION

    


    By:
/s/ Joseph DeMichele

    Name:Joseph
DeMichele

    Title:
Senior Vice President, Chief Investment Officer

    


    
      
        
        

      

      
        -5-